Comments for regulation2point0 http://regulation2point0.org Wed, 09 Nov 2011 22:44:54 +0000 hourly 1 http://wordpress.org/?v=3.1.1 Comment on Million Dollar Taxis: Another Wall Street Ripoff? by Bronwyn Howell http://regulation2point0.org/2011/11/million-dollar-taxis-another-wall-street-ripoff/comment-page-1/#comment-4892 Bronwyn Howell Wed, 09 Nov 2011 22:44:54 +0000 http://regulation2point0.org/?p=1721#comment-4892 In New Zealand, we neither limit entry into the taxi business (providing minimum safety and driver competence requirements - regularly reassessed - are met)nor regulate prices. We have real choice in cab quality and rarely face shortages at public ranks. Whilst there could be a 'tourists and natives' charging practice, routine repeat custom (the bulk of trips), the development of brands and driver collaboration via co-operatives (including co-operative collaborations across different cities and national brands) to a large extent overcome the problems (and even if there is a little price discrimination, is it necessarily a bad thing, given that the taxis at the airport or railway station are likely picking up people who have traveled that far already on transport that engages in such pricing?). At the margins, there may be some risks of over-supply and and (potentially) costly churn, but taxis themselves are not highly specific assets and market forces have already induced levels of sharing fixed costs of systems, premises etc. The co-ops also offer an ideal means of self-regulation of (notably) quality standards and performance (including issues related to drivers) that are not easy necessarily either cheap or easy for arms-length regulators to address. In New Zealand, we neither limit entry into the taxi business (providing minimum safety and driver competence requirements – regularly reassessed – are met)nor regulate prices. We have real choice in cab quality and rarely face shortages at public ranks. Whilst there could be a ‘tourists and natives’ charging practice, routine repeat custom (the bulk of trips), the development of brands and driver collaboration via co-operatives (including co-operative collaborations across different cities and national brands) to a large extent overcome the problems (and even if there is a little price discrimination, is it necessarily a bad thing, given that the taxis at the airport or railway station are likely picking up people who have traveled that far already on transport that engages in such pricing?). At the margins, there may be some risks of over-supply and and (potentially) costly churn, but taxis themselves are not highly specific assets and market forces have already induced levels of sharing fixed costs of systems, premises etc. The co-ops also offer an ideal means of self-regulation of (notably) quality standards and performance (including issues related to drivers) that are not easy necessarily either cheap or easy for arms-length regulators to address.

]]> Comment on Bank Regulators Playing Whac-a-Mole by Bronwyn Howell http://regulation2point0.org/2011/10/bank-regulators-playing-whac-a-mole/comment-page-1/#comment-4891 Bronwyn Howell Wed, 09 Nov 2011 20:52:34 +0000 http://regulation2point0.org/?p=1712#comment-4891 I note that in New Zealand, where for a variety of reasons (including a light-handed regulatory regime at the time that debit cards were introduced - over 20 years ago - Wilkinson (2011) - shortly to appear in Competition and Regulation Times - look on http://www.iscr.org.nz after November 21) there have NEVER been consumer charges for debit card use. Consequently, New Zealand has one of the world's highest utilisation rates for debit card use, and cheque use is next to zero outside the business environment. Furthermore, a high degree of comfort with debit card use has flowed through into very high levels of use of electronic banking - further reinforcing the move to the 'chequeless society'. There have been consequences for the banking industry - notably consolidation and closure of physical bank branches and a reduction in the number of Automatic Teller Machines (and transaction costs of keeping them stocked and secure). If there has been any customer-based charging, it has been absorbed into the monthly fees charged for account management, so appears as a 'flat fee' regardless of the number of transactions undertaken. Competition between banks on this base fee is alive and well. I note that in New Zealand, where for a variety of reasons (including a light-handed regulatory regime at the time that debit cards were introduced – over 20 years ago – Wilkinson (2011) – shortly to appear in Competition and Regulation Times – look on http://www.iscr.org.nz after November 21) there have NEVER been consumer charges for debit card use. Consequently, New Zealand has one of the world’s highest utilisation rates for debit card use, and cheque use is next to zero outside the business environment. Furthermore, a high degree of comfort with debit card use has flowed through into very high levels of use of electronic banking – further reinforcing the move to the ‘chequeless society’. There have been consequences for the banking industry – notably consolidation and closure of physical bank branches and a reduction in the number of Automatic Teller Machines (and transaction costs of keeping them stocked and secure). If there has been any customer-based charging, it has been absorbed into the monthly fees charged for account management, so appears as a ‘flat fee’ regardless of the number of transactions undertaken. Competition between banks on this base fee is alive and well.

]]> Comment on Bank Regulators Playing Whac-a-Mole by Bill Shobe http://regulation2point0.org/2011/10/bank-regulators-playing-whac-a-mole/comment-page-1/#comment-4889 Bill Shobe Wed, 09 Nov 2011 14:51:39 +0000 http://regulation2point0.org/?p=1712#comment-4889 You leave out the very important contribution of state financial regulations. The banks and credit card companies lobbied hard for and won state rules making in illegal for retail merchants to offer discounts for cash transactions. This shifted the burden of the fee toward retailers/customers and away from the banks/credit card companies. Without taking these rules into account, the analysis is incomplete. This legally mandated burden shifting gave the retailers much greater incentive to push for the new federal legislation. The banks are now exposed to increased competition from cash transactions. Part of what we are observing is their adjustments to this new competitive margin in addition to the federal rate regulation on debit cards. You leave out the very important contribution of state financial regulations. The banks and credit card companies lobbied hard for and won state rules making in illegal for retail merchants to offer discounts for cash transactions. This shifted the burden of the fee toward retailers/customers and away from the banks/credit card companies. Without taking these rules into account, the analysis is incomplete. This legally mandated burden shifting gave the retailers much greater incentive to push for the new federal legislation.

The banks are now exposed to increased competition from cash transactions. Part of what we are observing is their adjustments to this new competitive margin in addition to the federal rate regulation on debit cards.

]]> Comment on Million Dollar Taxis: Another Wall Street Ripoff? by Jonathan http://regulation2point0.org/2011/11/million-dollar-taxis-another-wall-street-ripoff/comment-page-1/#comment-4851 Jonathan Wed, 02 Nov 2011 16:41:01 +0000 http://regulation2point0.org/?p=1721#comment-4851 My understanding of the industry is somewhat different. It is my understanding that the medallion owners lease the cabs out for shifts and the drivers keep the fares and their earnings reflect the net. Thus, the medallion owners get their revenues from lease payments, not fares. It doesn't change the incentives to get high fares, but the risk profiles are a lot different. The leasing system lowers the cost of monitoring drivers. My understanding of the industry is somewhat different. It is my understanding that the medallion owners lease the cabs out for shifts and the drivers keep the fares and their earnings reflect the net. Thus, the medallion owners get their revenues from lease payments, not fares. It doesn’t change the incentives to get high fares, but the risk profiles are a lot different. The leasing system lowers the cost of monitoring drivers.

]]> Comment on DOJ v. AT&T: Who’s Looking Out for Consumers? by Laura Peterson http://regulation2point0.org/2011/09/doj-v-att-whos-looking-out-for-consumers/comment-page-1/#comment-4701 Laura Peterson Tue, 11 Oct 2011 03:26:49 +0000 http://regulation2point0.org/?p=1680#comment-4701 Bob and Peter write: "T-Mobile USA is running just to stay in place. It lost almost a half-million contract customers in the first quarter of 2011. And though it managed to replace most of them, the bulk of the newcomers were less lucrative subscribers recruited though resellers." But were these problems unique to T-Mobile? Who else was losing, and who was gaining, customers, at those times and how, too, might those customers be characterized? They add: "Moreover, T-Mobile’s corporate parent, Deutsche Telekom, isn’t about to bankroll a rescue. The German communications giant has made it plain that it won’t invest more to sustain its American presence. Indeed, by the time a trial is over, a much-weakened T-Mobile may simply be unviable as a standalone entity." Deutsche Telekom was evidently happy with the AT&T offer, which promised a higher return than stand-alone investment in T-Mobile USA, especially in a sour economy. Its investment plans at the time it "made [them] plain" may have reflected its U.S. affiliate's merger/takeover prospects, the weak U.S. economy, or other factors. The proposed merger itself, along with the uncertainty occasioned by its challengers, are certainly disincentives to its investment in T-Mobile at this point. A "faster introduction of new technology" is promised, but is that a "likely benefit" to U.S. wireless customers as a whole, short-term and long-? While I tend to be skeptical of merger challenges, particularly by competitors, I don't know enough about the facts at play here to reach a conclusion on this particular merger. Bob and Peter write: “T-Mobile USA is running just to stay in place. It lost almost a half-million contract customers in the first quarter of 2011. And though it managed to replace most of them, the bulk of the newcomers were less lucrative subscribers recruited though resellers.” But were these problems unique to T-Mobile? Who else was losing, and who was gaining, customers, at those times and how, too, might those customers be characterized?

They add: “Moreover, T-Mobile’s corporate parent, Deutsche Telekom, isn’t about to bankroll a rescue. The German communications giant has made it plain that it won’t invest more to sustain its American presence. Indeed, by the time a trial is over, a much-weakened T-Mobile may simply be unviable as a standalone entity.” Deutsche Telekom was evidently happy with the AT&T offer, which promised a higher return than stand-alone investment in T-Mobile USA, especially in a sour economy. Its investment plans at the time it “made [them] plain” may have reflected its U.S. affiliate’s merger/takeover prospects, the weak U.S. economy, or other factors. The proposed merger itself, along with the uncertainty occasioned by its challengers, are certainly disincentives to its investment in T-Mobile at this point.

A “faster introduction of new technology” is promised, but is that a “likely benefit” to U.S. wireless customers as a whole, short-term and long-? While I tend to be skeptical of merger challenges, particularly by competitors, I don’t know enough about the facts at play here to reach a conclusion on this particular merger.

]]> Comment on DOJ v. AT&T: Who’s Looking Out for Consumers? by Ron Berkley http://regulation2point0.org/2011/09/doj-v-att-whos-looking-out-for-consumers/comment-page-1/#comment-4697 Ron Berkley Mon, 10 Oct 2011 14:30:48 +0000 http://regulation2point0.org/?p=1680#comment-4697 As always, it sounds too good to be true. AT&T adopts T-Mobile and we the customer get the treats. I have trust issues with corporate American. Maybe it's their off-shore accounts. Eighty percent of the Fortune 500 have them according to the Government Accounting Office. Corporations are not always loyal to their employees. I hate hearing that employees with fifteen years are told to hit the highway. True, such behavior on the part of corporate America has created net cash of over one-trillion dollars and it would be extra nice if said companies could share that with their stockholders, better service with their customers and trainig programs for workers who really want to work. Big mergers does, but not always, create barriers to entry which equals less competition, dead weight loss and unintended consequences like "too big to fail" which equals moral hazard. Where have I heard that term, moral hazard? One must admitt, like corporate American,I have self-interests at heart. I enjoy my eight year mariage to T-Mobel. Perhaps if there were more dates at the dance, I would tell T-mobile and AT&T to hit the highway but there is not. Lack of competition perhaps or maybe it's just me. As always, it sounds too good to be true. AT&T adopts T-Mobile and we the customer get the treats. I have trust issues with corporate American. Maybe it’s their off-shore accounts. Eighty percent of the Fortune 500 have them according to the Government Accounting Office. Corporations are not always loyal to their employees. I hate hearing that employees with fifteen years are told to hit the highway. True, such behavior on the part of corporate America has created net cash of over one-trillion dollars and it would be extra nice if said companies could share that with their stockholders, better service with their customers and trainig programs for workers who really want to work. Big mergers does, but not always, create barriers to entry which equals less competition, dead weight loss and unintended consequences like “too big to fail” which equals moral hazard. Where have I heard that term, moral hazard? One must admitt, like corporate American,I have self-interests at heart. I enjoy my eight year mariage to T-Mobel. Perhaps if there were more dates at the dance, I would tell T-mobile and AT&T to hit the highway but there is not. Lack of competition perhaps or maybe it’s just me.

]]> Comment on The War on Drugs: Doubling Down on a Bad Bet by Jack Coupal http://regulation2point0.org/2011/08/the-war-on-drugs-doubling-down-on-a-bad-bet/comment-page-1/#comment-4454 Jack Coupal Sun, 04 Sep 2011 18:32:02 +0000 http://regulation2point0.org/?p=1643#comment-4454 When did Mexico establish a civil government? When did Mexico establish a civil government?

]]> Comment on Apple’s iCloud and the Dilemma of the Walled Garden by Bronwyn Howell http://regulation2point0.org/2011/06/apple%e2%80%99s-icloud-and-the-dilemma-of-the-walled-garden/comment-page-1/#comment-3927 Bronwyn Howell Tue, 05 Jul 2011 22:48:22 +0000 http://regulation2point0.org/?p=1590#comment-3927 Another element of the 'cloud' relates to the distance the end user is from the location of the data and software. Cloud apps increasingly use http protocol, which exhibits decreasing returns in the dimensions of both the bandwidth available and the distance between the communicating parties. For small, remote economies such as NZ, the 'cloud' may also have productivity implications. It may be cost-effective in the development phase for some applications locally hosted in NZ to be replaced by apps on the cloud taking advantage of scale, but the use of them may be compromised by longer times taken to populate the pages relative to locally-stored data and apps. The problem is likely to be greatest where the owner of the app is not also the predominant user (e.g. Government filings, etc)as there is a real risk that an owner-centric CBA will not 'internalise' the additional usage costs that their cloud-sourcing decision imposes). This suggests that a different approach may need to be taken to decisions regarding cloud sourcing in these small distant economies (and indeed in respect to the costs of compliance for remote users even in large countries). For a discussion of these issues see Obren, M & Howell, B. The Tyranny of Distance Prevails. http://www.iscr.org.nz/f609,17429/17429_The_Tyrant_Lives_v3_Nov21.pdf We show that for NZ, the return trip time (RTT) for communicating between http-enabled applications in NZ and the west coast of the US and eastern Asia is around 220ms, compared to a worldwide average of 120ms to reach a google server and 60-100ms to a google server based within the US. Faster local bandwidth does not help - indeed, increasing local bandwidth from 8mbps to 100mbps (in excess of 10-fold increase) increases page load times by 5% when communicating with the US (13% with Australia. The http protocol itself also has an effect - at 60ms return trip time, faster local bandwidth for http-enabled applications exhibits decreasing returns such that an increase from 5mbps to 10mbps decreases page load time by only 10% - beyond 10mbps, the increase in page load times is negligible. Thus, faster local access networks assist in the 'cloud' model in the 'best case' only to the extent that they allow more data to be communicated (i.e. all benefits are associated with the application costs not necessarily the operational ones). When distance is also added, they may lead to reduce productivity. Another element of the ‘cloud’ relates to the distance the end user is from the location of the data and software. Cloud apps increasingly use http protocol, which exhibits decreasing returns in the dimensions of both the bandwidth available and the distance between the communicating parties. For small, remote economies such as NZ, the ‘cloud’ may also have productivity implications. It may be cost-effective in the development phase for some applications locally hosted in NZ to be replaced by apps on the cloud taking advantage of scale, but the use of them may be compromised by longer times taken to populate the pages relative to locally-stored data and apps. The problem is likely to be greatest where the owner of the app is not also the predominant user (e.g. Government filings, etc)as there is a real risk that an owner-centric CBA will not ‘internalise’ the additional usage costs that their cloud-sourcing decision imposes). This suggests that a different approach may need to be taken to decisions regarding cloud sourcing in these small distant economies (and indeed in respect to the costs of compliance for remote users even in large countries).

For a discussion of these issues see Obren, M & Howell, B. The Tyranny of Distance Prevails. http://www.iscr.org.nz/f609,17429/17429_The_Tyrant_Lives_v3_Nov21.pdf We show that for NZ, the return trip time (RTT) for communicating between http-enabled applications in NZ and the west coast of the US and eastern Asia is around 220ms, compared to a worldwide average of 120ms to reach a google server and 60-100ms to a google server based within the US. Faster local bandwidth does not help – indeed, increasing local bandwidth from 8mbps to 100mbps (in excess of 10-fold increase) increases page load times by 5% when communicating with the US (13% with Australia. The http protocol itself also has an effect – at 60ms return trip time, faster local bandwidth for http-enabled applications exhibits decreasing returns such that an increase from 5mbps to 10mbps decreases page load time by only 10% – beyond 10mbps, the increase in page load times is negligible. Thus, faster local access networks assist in the ‘cloud’ model in the ‘best case’ only to the extent that they allow more data to be communicated (i.e. all benefits are associated with the application costs not necessarily the operational ones). When distance is also added, they may lead to reduce productivity.

]]> Comment on An Offer Some Can’t Refuse by Senator Corker Loves Cash http://regulation2point0.org/2010/03/an-offer-some-can%e2%80%99t-refuse/comment-page-1/#comment-3736 Senator Corker Loves Cash Sun, 26 Jun 2011 15:31:08 +0000 http://regulation2point0.org/?p=556#comment-3736 The best way I can think of to put a stop to W. Allan Jones of Check Into Cash and Jones Management is to ask Senator Bob Corker to stop voting in Congress for questionable payday lenders like W. Allan Jones of Check Into Cash. Though W. Allan Jones tries to downplay his generous contributions through the payday-lender-run website, Payday Pundit, I am guessing that friends, family, and employees of W. Allan Jones and Check Into Cash are also contributing quite generously. Without the support of Senator Bob Corker, W. Allan Jones would never be able to get away with his ridiculous behavior. Call Senator Corker and tell him to stop supporting W. Allan Jones at Check Into Cash at this number: 423-756-2757, or write him at this address: U.S. Senator Bob Corker 185 Dirksen Senate Office Building Washington, D.C., 20510 or visit his website: http://corker.senate.gov/public/ The best way I can think of to put a stop to W. Allan Jones of Check Into Cash and Jones Management is to ask Senator Bob Corker to stop voting in Congress for questionable payday lenders like W. Allan Jones of Check Into Cash. Though W. Allan Jones tries to downplay his generous contributions through the payday-lender-run website, Payday Pundit, I am guessing that friends, family, and employees of W. Allan Jones and Check Into Cash are also contributing quite generously.

Without the support of Senator Bob Corker, W. Allan Jones would never be able to get away with his ridiculous behavior. Call Senator Corker and tell him to stop supporting W. Allan Jones at Check Into Cash at this number:

423-756-2757, or write him at this address:

U.S. Senator Bob Corker
185 Dirksen Senate Office Building
Washington, D.C., 20510

or visit his website:

http://corker.senate.gov/public/

]]> Comment on An Offer Some Can’t Refuse by Senator Corker Loves Cash http://regulation2point0.org/2010/03/an-offer-some-can%e2%80%99t-refuse/comment-page-1/#comment-3642 Senator Corker Loves Cash Tue, 14 Jun 2011 02:48:02 +0000 http://regulation2point0.org/?p=556#comment-3642 It's disturbing to see Senator Bob Corker more eager to line his pockets than to help those who voted to put him into office. How are you helping the average American, Senator Bob Corker, by lobbying so aggressively for the payday industry? How is it that you are so willing to be bought-and-paid-for by W. Allan Jones, Check Into Cash, and Jones Management? Is it worth the loss of your integrity and credibility? It’s disturbing to see Senator Bob Corker more eager to line his pockets than to help those who voted to put him into office. How are you helping the average American, Senator Bob Corker, by lobbying so aggressively for the payday industry? How is it that you are so willing to be bought-and-paid-for by W. Allan Jones, Check Into Cash, and Jones Management? Is it worth the loss of your integrity and credibility?

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